A marijuana tax hike would help boost affordable housing efforts in Denver under a proposal released Monday by Denver Mayor Michael Hancock.
The plan would double the city’s Affordable Housing Fund annually – from $15 million to $30 million – and generate an additional estimated $105 million in funding for affordable housing over the next five years. To finance the $105 million funding surge, the city and the Denver Housing Authority would issue bonds.
“This proposal will deploy more funding quicker to support our residents and families without increasing costs on the very households we are working to serve,” Hancock said in part in a statement.
The funding would aid the city in acquiring new land for affordable housing and subsidizing new low-income housing projects. Ultimately, Denver officials say the funding boost would double its creation and preservation of units — from 3,000 units to at least 6,400 units over five years.
“Each additional unit represents a new opportunity for a family in Denver, which is why we continually look for creative ways to increase funding for affordable housing,” Denver City Council President Albus Brooks said in a statement.
Created in fall 2016, Denver’s current affordable housing fund has promised an estimated $150 million be dedicated to affordable housing efforts, including development and preservation, over a decade. The fund currently operates on a mix of property tax revenue and a one-time fee on new development, according to the city.
Denver’s plan would in part pay for the plan through a proposed increase in the marijuana sales tax from 3.5 percent to 5.5 percent, which the city says would generate an estimated $8 million per year. The city would also allocate $7 million per year from the general fund.
The plan has won some early praise from housing advocates like Brad Segal with All In Denver, who told Denverite he was surprised by the city’s “ambition” with the proposal.